BUSENT| MODULE 1: Finding Business Opportunities

FOCUS:
1) Finding a strategic and systemized way of finding the right business:
a) Observing the environment of the business
b) Identifying internal strengths/ factors inherent to the entrepreneur
c) Using a systemized Opportunities Attractiveness Matrix (OAM)
2) Identifying five business opportunities
3) Choosing the best and appropriate research methodology in determining the demand and market
acceptability of your chosen product/ service
4) Finalizing the most feasible business

STEP 1: Scanning the Market

External/Internal Source of Specific External Source of Potential Business Opportunity

Business Opportunity Business Opportunity

*Market – customers’ needs, wants, and demands; will you able to satisfy? Identify external and internal sources
 External Sources of Business Opportunities (S-T-E-P-I-N-F-C-C-S-P)
1) Sociocultural Factors
2) Technological Advancements
3) Economic Growth or Decline
4) Politics and Legal Factors – Licenses
5) Industry Trends
6) New Discovery or Knowledge
7) Futuristic/ Unexpected Opportunities
8) Consumer Preferences
9) Competitors
10) Societal Problems/ Irritants in the Marketplace
11) Physical Location of the Entrepreneur
 Internal Sources of Business Opportunities (T-F-P-L-E-V)
1) Talents, hobbies, skills, expertise or economic background
2) Financial Capacity
3) Processes/ Operational Capacity
*May mga kakilala kang pwedeng magpahiram ng mga equipments sayo
4) Leadership and People Management Skills
*Applicable when your business is big and you want to have employees on your own
5) Entrepreneurial Attitude/ Character
6) Vision and Strategy

STEP 2: Choosing the Right Product or Service for the Market

 4 Elements of a compelling business opportunity (Mar-Fin-Com-En)
* Compelling – convincing; something that you think will succeed
1) Market potential
- Business presents superior value
*Balance marketing mix in order to deliver superior value
*Superior in terms of quality and not of price
2) Financial Feasibility
- Business is a potential cash cow
 *Cash cow – Profit is unlimited because there is always a customer that buys your product
(properly designed marketing mix)

3) Competitive Advantage
*Your edge from your competitors
- Business solves problem, issue, need, and want
*Your customers will not buy if they do not need or want it
*Businesses have their own strategies

4) Entrepreneur’s Resources
- Business matches skills, resources, and risk appetite
*Do I have enough resources to put up a business?
 Opportunities Attractiveness Matrix (OAM)
 Attractiveness
- Business feasibility/ business viability
*If it’s worth implementing
 Measures feasibility of the business opportunity
 Does not guarantee success
*OAM is just a tool to help you decide if you want to continue or not

STEP 3: Testing the Market

 Market Research
 “The devil is in the details”
*When you miss small details, it’s very risky; your business might fail
 Comprehensive understanding of
 Customer’s demand
 Market opportunity

Market Research
1) Come up with clear marketing objectives
 Specific, Measurable, Achievable, Relevant, and Timely (SMART)
2) Choose the research design
a) Exploratory
b) Descriptive
c) Causal
3) Design and prepare the research tool
4) Collect the data from the research participants
5) Interpret the gathered data

MODULE 2: Preparing the Business Plan

PARTS:
1) Strategic Plan for Competitive Advantage
2) Marketing Plan
3) Operational Plan
4) Financial Plan

I. Strategic Plan for Competitive Advantage

 Deals with the competitive environment
*goals and objectives in the long run
*set up a business that will set you apart from others
 Competitive Environment
– Dynamics external system which a business competes and functions

 To scrutinize competitive advantage, entrepreneur must conduct:

a) Industry Analysis
*Industry – group of companies/businesses selling/offering the same product or services
 Examination of the industry the entrepreneur will participate in

o Porter’s Five Forces Model

Customers

Potential Industry Suppliers

Entrants Competitors

Substitutes

*The more competitors, potential entrants, and substitutes you have, the more aggressive you
are.
*The higher the number of suppliers and customers you have, the more relax you are.

b) Competitive Analysis
*Examine our competitors – now you know your edge, know their strength na weakness
mo in order for you to know what to improve in your business
 Examination of what the direct and indirect competitors are doing and what they
can possibly do in the future
*Indirect competitors – same target market kahit iba products na inooffer
 Driving forces
 Rationale of actions

o Competitive Profile Matrix

*Matrix – merong scale
 Essential strategic management tool that compare the entrepreneur’s business
with major players in the industry
 Internal
 External

o Competitive Strategies
*set up your strategies
 Porter’s Generic Competitive Strategies
1) Cost Leadership Strategy – the lower the price, the better
*more production, less cost, less price
 2) Differentiation Strategy – you offer a product/service that sets you apart
from others (unique or parang may something na dinagdag sa isang
product)
*we don’t care about the price, more on the quality of a product
3) Focus Strategy – specific market (merong target market)
*can be combined with cost or differentiation but not both kasi it’s
contradicting – you might fail pa

II. Preparing a Marketing Plan

 Part of the business plan which outlines the marketing strategy and tactics
 Includes the following marketing factors:
 Costs
 Goals
 Action steps

PARTS
1) Product or Service Offering
 It refers to the value that the business will give to a customer
2) Value Proposition and Unique Selling Proposition
 Value Proposition
– Straight forward statement of what you are offering
– Why a customer should buy your product
 Unique Selling Proposition
– What sets you apart from your competitors
– How will you sell your product
3) The 7Ps of Marketing
 Original 4Ps
– Product
– Price
– Place
– Promotion
 Additional 3Ps
– People
– Packaging
– Processes
4) Sales Forecast
 Projection of potential sales that the business will generate as a result of marketing
*When you do your sales forecast, it should be relevant to your marketing efforts

III. Operational Plan

 Contains specific details of a business operation
 Includes:
 Production/ Manufacturing
 Inventory
 Distribution
 Goal: Come up with optimal processes that will save operational costs
*mababa cost at the same time effective and efficient pa rin

ASPECTS
1) Methods
 Manufacturing elements
 Input
  Process
 Output
 Distribution method
 What are the methods that you will do for your products to reach the customer
 Distribution channel
 What type of distribution channel (stores, wholesalers, retailers)

2) Manpower
 Labor force
3) Machine
 Equipment
 Soft – software, etc
 Hard – ovens, delivery trucks, conveyers
4) Materials
 Inputs in producing your goods

Operational Costs
 Other costs not directly associated with manufacturing a product
*Example: rent

IV. Financial Plan

 Details where the entrepreneur wants to take his business in terms of:
 Profitability
 Net worth
 Cash flow

PARTS:
1) Projected Income Statement
2) Projected Balance Sheet
3) Projected Cash Flow Statement
*5 years – projected